What may end up being Pittsburgh's next great autonomous vehicle startup hope for the city's Robotics Row is nearing a final agreement with Burns Scalo Real Estate to take in the range of 70,000 square feet of the Vision on Fifteenth, the development firm's 265,000-square-foot, mixed-use development along Smallman Street in the Strip District.
Sources aware of the potential deal indicate that an as-yet-to-be-fully-announced company — the name remains yet to be made publicly known — is being led by Bryan Salesky and Peter Rander, who in 2016 co-founded since-shuttered Argo AI LLC. The duo are in the market for a new office, potentially looking elsewhere in the Strip District as well, while they ramp up for the potential hiring of hundreds of workers locally amid some major capital raising for the new venture.
Jim Scalo, CEO of Green Tree-based Burns Scalo, declined to comment on any specific deal negotiations going on for the Vision, a project on which construction was completed in the aftermath of the pandemic that reaches eight stories and includes 233,000 square feet of office space available.
Speaking more broadly about the current state of the office market, Scalo remains confident in the prospects for the Vision, a development that has inked only one office tenant so far; a 20,000-square-foot office for ATI announced in August 2021.
"We have more demand for that building than we have space," said Scalo of the Vision, reiterating a common refrain that an office market coming out of the pandemic will result in new buildings generating demand over old, coming as it does with new construction rents of $40 a square foot or more.
The prospects of new leasing comes in what's been a relatively quiet period for new office deals in the Strip District, a stretch of town that generated some of the strongest demand in the region in the middle of the last decade, a time when autonomous vehicle firms were setting up as a new industry and when Uber Technologies Inc. came to Pittsburgh and set up a major AV development presence in the neighborhood here seeking to commercialize the technology.
Since then, now publicly traded Aurora Innovation Inc. (NASDAQ: AUR), headquartered a block away from the Vision, has long ago folded Uber's AV assets into the organization, and mostly has sat on many of Uber's previous real estate holdings.
One of the spaces in the Strip District most likely to offer the new AV startup space as large as 70,000 square feet is the Crucible Building, a former Uber space Aurora put on the market for sublease last December, which totals 120,000 square feet in a property that can mix office use along with research and development functions.
Sources familiar with but not authorized to speak publicly about Salesky and Rander's plans have said that an international banking giant has infused the AV firm with hundreds of millions of dollars in investment funding, capital that's crucial for what's expected to be an expensive hardware-heavy operation. It's unclear how much space the new AV company would need that would function as pure office space and how much might be used for a research and development function, which might require more open space and higher ceilings.
"It's not a rebirth. It's not a rebound. This is part of the evolution," Tommy Johnson, a managing partner at Allegheny Strategy Partners who is familiar with the plans following his extensive experience in the local AV industry, told Pittsburgh Inno back in March. "The future of auto will happen here; Bryan is one of those entrepreneurs who is dedicated to Pittsburgh."
At the time, Johnson said one of the main focuses of the new company will be the commercialization of autonomous driving solutions for the trucking industry and that its main investor is not an automaker. It's a marked difference from Argo's approach, which looked to bring self-driving technology to passenger vehicles.
Those plans for Argo came to an abrupt end in October 2022 when Ford Motor Co. and Volkswagen AG, Argo's two largest investors, announced they'd no longer support the venture and instead would pivot to developing advanced driver assistance capabilities in-house. Ford has since launched Latitude AI, a subsidiary company based in Pittsburgh that has taken over Argo's former footprint in the Strip District and brought with it about 550 former Argo employees.
A formal announcement regarding Salesky and Rander's AV startup is expected to be made in the coming weeks, sources familiar with company plans have said.
If a final lease agreement comes to fruition at the Vision, Salesky and Rander's new company will play a similar role in helping to anchor a new office building in the Strip as their Argo AI did in 2017.
It was in that year not long before the pandemic changed everything that Oxford Development Co. and the then AV newcomer announced that Argo AI had leased 65,000 square feet, with expansion options, in what became the 131,000-square-foot Riverfront West building at 3 Crossings now occupied by Latitude AI.
